Natural Gas On Sale

It’s been a long time since i’ve blogged about anything. I’ve been so fed up with the criminal banker shenanigans lately that I just stopped giving a shit about the market. I’ll tell you what though…there’s still opportunity and currently I see it in one of my favorite trading vehicles: UNG (the natural gas ETF).

The price of natural gas has been beaten down like a redheaded-stepchild who just came home from school with a bad report card. If you take a look at this chart you can see that Natural Gas has been sold off for the last 9 months. That’s a pretty strong trend and I think it’s time for a turnaround. I like the curve in price we’re seeing. It’s showing me that the rate of decline is decreasing. Seems like your typical exhaustion pattern.

 

Look at the technical indicators:

• CCI at -101 (oversold/at support)
• MACD nearly -5 (oversold)
• Stochastics at almost 9 (oversold) 

Here’s the thing. This is not a short-term chart. This is roughly a two-year chart we’re looking at. Give yourself some time. Inventories are at record highs, industrial production is at record lows, we’re in a depression. Oh well, who gives a shit. The fact of the matter is that natural gas is cheap as shit and there’s value to be found in buying it now and selling it during hurricane season (August).

Sure sure, you’re probably thinking to yourself “what a heartless scumbag! He’s looking to capitalize on the potential misfortune of others for his own personal financial beneft.” Let me tell you something, you’re totally right. Trading is immoral.

In the interest of disclosure and transparency, I would like to let you know that I am currently holding an out-of-the-money call option for October 2009 expiration.